Etihad Airways offers its passengers one of the world's most extravagant First Class cabins.

Founded in 2003, the Middle-Eastern airline has cemented its status as one of the best airlines in the world in an impressively short amount of time. 

First Class passengers enjoy a complimentary chauffeur service, an onboard shower and spa, and one of the largest in-flight apartments available.

Etihad offers several first class products. There's a three-room suite called "The Residence" and a more conventional single-room suite called "The Apartment".

Daniel Gillaspia, a prolific travel-hacker from Texas, flew from Abu Dhabi to New York in one of the carrier's famous "apartments."

Thanks to meticulous planning and some serious credit card crunching, he managed to accumulate over 1 million air miles and pay just $52.80 for the $10,000 journey, and he explains how he did it on his blog, UponArriving.

Gillaspia provided us with photos of his experience in one of the best First Class cabins in the world. 

With Etihad, the premium experience begins before you even arrive at the airport. With a complimentary chauffeur service which travels across the entire United Arab Emirates, you can arrive in style.

Upon arrival, First Class passengers have their own private entrance. From here, your bags are immediately taken from you and you're escorted to the First Class check-in desk.

The desks even have leather seats in front of them, just in case you need to sit down during the two-minute check-in​ process.

It’s a long haul between New York and Mumbai, but Etihad, the United Arab Emirates national carrier, has figured out a way to make it a comfortable journey—for those willing to pay $38,000 (Rs 25 million) for a one-way ticket, anyway.

It's the new most expensive flight in the world. A round-trip ticket would cost a staggering $76,000 (£52,000) at single or double occupancy. Plus: it’s not even a direct flight. It has a stopover in Abu Dhabi.

A hallway leads to a bedroom with a double bed—a first for a commercial airline—and a 27-inch flat-screen TV. Before landing, passengers can freshen up in a private bathroom. They can even take a bona-fide shower.

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Over the past decade, New York's John F. Kennedy International Airport has made a concerted effort to improve customer experience and integrate a higher level of luxury amenities. One of the most recent and impressive additions is the Etihad Airways Premium Lounge located inside JFK's Terminal 4.

"Everything we do at Etihad is about providing unparalleled luxury," Etihad senior vice president for the Americas, Martin Drew, told Business Insider during a tour of the facility. "We don't necessarily benchmark ourselves just against other airlines, but more so against some of the finest hotels and restaurants in the world."

Opened at the end of 2015, the lounge extends the Etihad's premium service beyond the aircraft — putting the airline in a prime position to attract highly lucrative business and high-class leisure travelers. In addition to the lounge, the Abu Dhabi-based airline is ramping up its New York operation with the adoption of the Airbus A380 superjumbo on its JFK-bound flights.

Here's a closer look at the JFK Terminal 4's Etihad Lounge.

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As the frosted glass doors slide open, we were immediately greeted by an Etihad Airways employee.

Once inside, the lounge features a fully stocked bar,...

... An assortment of fine dining options, as well as plenty of places to ...

Step through the sliding glass doors of Etihad Airways' Terminal 4 lounge in JFK, and you will find a sprawling space dedicated to the comfort of their premium passengers. We got access to the lounge to check out everything it has to offer, including a secret lounge within the lounge. 

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Since its founding in 2003, Etihad Airways has managed to storm its way to the forefront of the airline industry.

This week, the airline's parent company — Etihad Aviation Group — announced that longtime CEO James Hogan would step down from his post later this year.

Hogan, who became the airline's CEO in 2006, is credited as the man who oversaw Etihad's meteoric rise from a 22-aircraft regional airline to a global aviation conglomerate with equity in more than half a dozen international airlines and a fleet of more than 700 aircraft.

Hogan's departure is certainly a blow to the company.

With that said, Hogan's departure doesn't necessarily serve as a signal of impending trouble at Etihad as much as a confirmation that the era of explosive growth at the airline — and its fellow Middle Eastern megacarriers — is over.

Hogan — along with CFO James Rigney — will leave Etihad in the second half of 2017 to join an as-yet-unnamed investment firm.

Etihad was not immediately available for comment.

Over its short time in business, Etihad has made the flashy acquisitions, garnered the critical acclaim, and showed off its flying palace in the sky. Now it's time to settle down and focus on life as a big-time international airline. In that respect, Hogan and his team have put Etihad in a good, but not perfect, position.

Here are some of the challenges Etihad must face down.

Partners for better or for worse

Over the past few years, Hogan has embarked on an ambitious equity-acquisition spree that has seen Etihad take substantial ownership stakes in a series of "partner airlines." This includes 49% of Alitalia, 29% of Air Berlin, 49% of Air Serbia, 24% of Jet Airways, 20% of Virgin Australia, 40% Air Seychelles, and 33% of the Swiss-based Etihad Regional.

(In September, these partner airlines along with Etihad Airways and its accompanying subsidiaries were reconfigured to form Etihad Aviation Group.)

In theory, Hogan's partnership concept makes a tremendous amount of sense. Investing in or taking over struggling airlines in advantageous markets for pennies on the dollar while simultaneously growing Etihad's global reach is strategically sound. This approach also allows Etihad to enter potentially hostile markets free of political opposition and without the need to launch an operation from scratch.

In practice, the partnership strategy is much more complex. Some have worked out well for Etihad. For instance, Air Serbia has relaunched and become a solid feeder into the Etihad network. The investment in Jet Airways has helped Etihad unlock the potentially lucrative Indian market. While Virgin Australia has become a viable competitor for Qantas.

At the same time, Germany's Air Berlin and Italy's national carrier, Alitalia, have not fared so well. Both airlines were acquired to help Etihad increase its reach into the prized European and transatlantic markets, and to a certain extent they have done exactly that. Operationally, however, Air Berlin and Alitalia have continued to bleed money.

So, what happened?

On the face of it, the $2.35 billion Alitalia investment seemed like a solid deal. For the cost of a few Airbus A380 superjumbos, the company acquired a major airline with a fleet of 100 planes, Hogan once said during an interview with Business Insider.

"These two investments have turned out to be sort of Etihad biting off more than it can chew," Airways senior business analyst Vinay Bhaskara told Business Insider.

According to Bhaskara, there are two types of reclamation projects that tend to succeed in the airline industry. The first is an airline that is underperforming simply because it's "making boneheaded strategic errors" to the point at which the airline is essentially its own worst enemy. These are easier to fix because they tend to be in good markets with good fundamentals. Thus, a management change should do the trick, Bhaskara said. Jet Airways falls into this category.

The second is an underperforming airline that is government owned or struggling with an incredible amount of internal dysfunction. These turnarounds can be successful if an outside force such as Etihad is "handed the keys to the kingdom" to tear down and rebuild the airline after making wholesale changes. This is exactly what Etihad was able to do at Air Serbia, Bhaskara added.

Technically, Air Berlin and Alitalia should have gone into this second category. But Etihad was never given the chance to implement the same type of full rebuild as Air Serbia.

With Alitalia, Etihad brought in new management, revamped its product, and improved its service. Many of the old problems that plagued the "Old Alitalia," however, still plague the "New Alitalia" today. Bhaskara said one of the major issues the airline ran into was the powerful labor unions that prevented Etihad from making drastic changes that could have made the airline profitable.

According to the Financial Times, the last time Alitalia generated an annual profit was 2002 — one year before the founding of Etihad Airways.

At Air Berlin, Etihad ran into similar challenges with organized labor. In addition, the two airlines faced legal challenges in Germany over their ability to sell tickets across each other's networks.

Bhaskara believes the struggles at Air Berlin and Alitalia served as a catalyst for Hogan's departure from Etihad.

Cheap oil is bad for business

While most airlines love periods of low fuels prices, it's a major problem for Etihad and its fellow Middle Eastern carriers Emirates and Qatar Airways — also know as the ME3.

Even though Etihad and the rest of the ME3 have become world renowned for their top-notch customer service, lavish appointments, and incredible first-class accommodations, the airlines actually depend on offering large numbers of affordable economy seats to fill their planes and makes ends meet.

Traditionally, the ME3 has been able to be competitive by undercutting its rivals in terms of price while offering a more premium experience in exchange for a slightly longer flight. (Almost all ME3 flights either originate or end at their Persian Gulf megahubs, meaning most flights tend to be longer.)

Cheap oil makes it difficult for the ME3 to beat its competitors on price. When fuel prices are high, ticket prices are high. As a result, the discount that Etihad and the rest of the ME3 can offer is higher in terms of total dollars. With lower ticket prices across the industry because of cheaper fuel, the ME3 carriers have to offer a greater percentage discount to have the similar effect on customers.

"As human beings, we are conditioned to judge absolute price differences as opposed to relative price differences," Bhaskara said. "A 10% discount on $900 seems more appealing than a 10% cut on $700. We're more likely to see an airline charging $810 versus $900 as a good deal than an airline asking for $630 as opposed to $700."

Consequently, Etihad, Emirates, and Qatar Airways' ability to price competitively versus their rival legacy carriers has been greatly eroded.

The Trump card

The ME3's greatest critics are the US trio of American, Delta, and United — also known as the US3.

The US3 have said the explosive growth experienced by Etihad and its fellow Middle Eastern carriers has been fueled by more than $50 billion in unfair government subsidies over the past decade.

"We've done nothing improper," Hogan said in a 2015 interview with Business Insider. "We've created a great airline with great service, created value, and the accounts are audited by one of the top accounting firms in the world. I don't know what the problem is."

The US carriers also claim that continued expansion of the ME3 into the US will lead to the loss of domestic aviation jobs. As a result, the US3 contend that the ME3 are in violation of the Open Skies bilateral agreements that govern air travel between the US and foreign nations.

The US3 petitioned the Obama administration to reevaluate and renegotiate the Open Skies agreements with the United Arab Emirates and Qatar.

In July, representatives of the UAE and Qatari governments met with members of the Obama administration to discuss the matter. No concrete results, however, emerged from those talks.

With President Donald Trump and his "America First" initiative in full swing, the US3 will once again ask the federal government for assistance regarding the ME3. During its latest earnings call, American Airlines made it clear that it would ask the Trump administration to take action against the Middle Eastern trio.

All in all, Etihad is in the midst of a period of great change. The favorable fare environments and easy untapped markets are starting to fade. However, the partnership airline model installed by Hogan, while troublesome at times, may be the key to the company's future success.

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We took a look inside The Residence, Etihad's most expensive ticket option. The Residence is a full-on home in the sky, complete with a living room, double bed, and even a shower. A round-trip ticket from NYC to Abu Dhabi costs $31,000 for one, and $41,000 for two.

The Residence also comes with access to a secret lounge, hidden within the main Etihad lounge in JFK airport. 

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On Tuesday, the US Department of Homeland Security announced the introduction of a ban on electronic devices for passengers on nonstop flights originating from 10 airports in the Middle East and Africa.

"Evaluated intelligence indicates that terrorist groups continue to target commercial aviation and are aggressively pursuing innovative methods to undertake their attacks, to include smuggling explosive devices in various consumer items," a senior administration official said on a call with members of the media.

"Based on this information, Secretary of Homeland Security John Kelly and Transportation Security Administration Acting Administrator Huban Gowadia have determined it is necessary to enhance security procedures for passengers at certain last-point-of-departure airports to the United States."

The enhanced security procedures will require passengers to place all electronic items larger than a cellphone in their checked luggage so the devices cannot be accessed in flight. This includes laptops, tablets, e-readers, portable DVD players, gaming devices larger than a smartphone, and travel-size printers and scanners.

The US Federal Aviation Administration, however, requires that all lithium-ion batteries, such as those that power laptops, cameras, and tablets, be allowed on board the aircraft only in carry-on luggage because of concerns about fire. It is unclear how the affected airlines will reconcile those guidelines.

Ten airports in eight countries — plus nine airlines — will be affected by the "laptop ban." They are:

• Queen Alia International Airport (AMM) in Amman, Jordan.
• Cairo International Airport (CAI) in Cairo, Egypt.
• Ataturk International Airport (IST) in Istanbul, Turkey.
• King Abdulaziz International Airport (JED) in Jeddah, Saudi Arabia.
• King Khalid International Airport (RUH) in Riyadh, Saudi Arabia.
• Kuwait International Airport (KWI) near Kuwait City, Kuwait.
• Mohammed V Airport (CMN) in Casablanca, Morocco.
• Hamad International Airport (DOH) in Doha, Qatar.
• Dubai International Airport (DXB) in Dubai, United Arab Emirates.
• Abu Dhabi International Airport (AUH) in Abu Dhabi, UAE.

Airlines affected by the ban are:

• Royal Jordanian Airlines
• EgyptAir
• Turkish Airlines
• Saudia
• Kuwait Airways
• Royal Air Maroc
• Qatar Airways
• Etihad Airways
• Emirates

According to the senior administration officials on the call, the ban will affect only nonstop flights to the US originating from these airports — which equates to roughly 50 flights a day. Passengers connecting through another destination such as an airport in Europe will not be subject to the ban. Passengers connecting through the affected airports for nonstop flights to the US, however, are advised to place their large electronic devices in checked luggage at their point of origination.

No US-based airlines will be directly affected by the ban, as none offer nonstop service to the affected destinations.

Airlines will have up to 96 hours, beginning Tuesday at 8 a.m. EDT, to comply with the new policy. "If they fail to comply with the security directive and emergency amendment, we will work with the Federal Aviation Administration to pull their (operating) certificates and they will not be allowed to fly to the United States," an administration official said on the call.

Administration officials denied claims the new policy was related to the dispute between the US-based airlines American, Delta, and United and their Middle-Eastern rivals from Qatar and the United Arab Emirates over allegations of unfair government subsidies.

The DHS cites the attempted downing of Daallo Airlines Flight 159 in February of last year in which a terrorist managed to sneak a "sophisticated laptop bomb" past X-ray scanners in Somalia as an example of the threat the directive is attempting to counteract. In addition, the agency points to the 2015 bombing of a Russian MetroJet Airbus in Egypt that killed all 224 people on board along with recent terrorist attacks at Brussels Airport and Ataturk International in Istanbul.

Rumors of the laptop ban surfaced Monday after Royal Jordanian Airlines tweeted a description of the ban to its customers before deleting the post a few hours later.

Business Insider asked Emirates, Etihad, and Qatar Airways for comment. According to Emirates, the airline only received the order from the US government a few hours ago. However, all three carriers say that they plan to comply with the directive and will spend the new few days working out the logistics of the ban.

Officials say there is no end date for the ban and its necessity will be periodically evaluated.

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Etihad Airways says it will "Make Flying Great Again" in its latest ad. 

The new commercial, which was released on social media in response to the US government's ban on laptops and other large electronic items on flights from certain airports in Africa and the Middle East to the US, reassures customers that they will still have access to in-flight entertainment. 

"Enjoy endless entertainment on demand ... including the latest movies, TV box sets, live news and sports," the ad says. 

The new security procedure requires passengers to place all their electronic items larger than a cellphone in their checked luggage. This includes laptops, tablets, e-readers, portable DVD players, gaming devices larger than a smartphone, and travel-size printers and scanners.

Etihad also reiterates that its passengers will have access to their cell phones during the flight and can use the onboard Wi-Fi to stay in touch.

Emirates released a similar commercial starring Jennifer Aniston earlier this week. 

Business Insider reported earlier this week that the the ban will affect only nonstop flights to the US originating from these airports, which equates to roughly 50 flights a day.

Watch the Etihad commercial here:

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The first-class experience in the sky is forever getting more extravagant. 

A number of commercial airlines have now also built first and business class bars onboard, offering a space for their wealthiest passengers to quaff champagne while they socialize at 35,000 feet.

Gilbert Ott, a New York-based travel expert, has tried them all.

Ott profiled his first-class bar experiences on his blog God Save the Points. To his knowledge, there are only six airlines in the world to have onboard bar lounges, including Virgin Australia, Korean Air, Etihad Airways, Emirates Airlines, and Qatar Airways. Virgin Atlantic is currently the only airline to boast a bar on all of its airplanes.

Ott helped us rank these bars, and revealed which one scored highest in the luxury stakes.

6. Virgin Australia — The full-service bar onboard the Boeing 777 "has a modern, hotel lobby style layout," Ott wrote on his blog.

Guests traveling to LA or Abu Dhabi on Virgin Australia's Boeing B777 can enjoy a business class bar "with a modern, hotel lobby style layout," Ott wrote on his blog. 

There's space at the bar for up to four guests to sit and have a drink, while a separate lounge area offers seating for two more passengers to relax and soak up the ambiance. 

Ott posted: "It's not the biggest, but if at any point during your 13 hours in the air between Australia and the US you need a place to hang, it's pretty magnificent!"

5. Virgin Atlantic — This airline, which gives business class passengers bar access on all of its planes, is "big on cocktails," said Ott.

Virgin Atlantic is the only airline to have bars on all of its planes, available to business class passengers. The airline is "big on cocktails," Ott told Business Insider.

"Virgin Atlantic often does a mojito or something similar. Refreshing and clean in the air. Definitely makes leaving a nice place easier."

In fact, Ott had one of his best plane experiences in upper class with Virgin Atlantic, flying from London Heathrow to JFK on New Year's Eve.

"We took off around 9:30, a bit late and 3 hours into the flight I was at the bar, the captain called the bar phone and started a countdown with the stewardess. As everyone counted they poured champagne for us, apple juice for them and we had a new years toast at a bar on a plane. We did this I think two more times as we crossed the five time zones en route to NY, landing just before one last midnight!"

4. Korea Air's Celestial Bar — Found aboard the carrier's A380 planes, this bar is a "futuristic hotspot where people chill out and drink Absolut vodka," Ott wrote.

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Guests aboard Korean Air's A380 airplanes can experience the futuristic "Celestial Bar." 

Ott wrote on his blog: "People chill out drinking Absolut vodka and make their own cocktails" at this lounge. The leading vodka brand has partnered with Korean Air on this venture. 

"It's a futuristic hot spot in the sky, which also happens to be underutilized, giving guests space to spread out, there's even a second mini location too," he added. 

US airlines have responded to Emirates' announcement that it will reduce service to the US.

In a statement, the Partnership for Open and Fair Skies — the lobbying organization that speaks on behalf of American Airlines, Delta Air Lines, and United Airlines — said it was "laughable" that Emirates would refer to itself as a profit-oriented enterprise.

The partnership's chief spokesperson, Jill Zuckman, accused the Middle Eastern carriers of being instruments for "their governments' goals to dominate global aviation" and operate without regard for profitability.

Here is the complete statement from Zuckman:

"The fact is, market demand has never played a role when the Gulf carriers decide where to fly. It is well known that the Gulf carriers, including Emirates, lose money on most of their flights to the United States and are propped up by billions of dollars in government cash. Their business model is based on growing their networks without regard to profitability in order to serve their governments' goals to dominate global aviation.

"A perfect example is Emirates' most recent route between Athens, Greece, and Newark, NJ, a money-losing flight that is only possible because of government subsidies. That Emirates would refer to itself as 'profit oriented' is simply laughable."

On Wednesday, Emirates said it would reduce the number of flights to five of the 12 US cities it currently serves — including Boston, Los Angeles, and Seattle — because of a decrease in bookings. The airline, based in Dubai, United Arab Emirates, blamed the Trump administration's travel policies for the reduction in demand.

This is just the latest episode in the dramatic feud between America's three mega-carriers and the Persian Gulf's trio of heavyweights.

Since 2015, American, Delta, and United (the US3) have been complaining about competition from three huge and fast-growing Middle East-based rivals — Emirates, Etihad, and Qatar Airways (the ME3).

According to the US3, the ME3's growth has been fueled by as much as $50 billion in subsidies over the past decade, allowing them to flood the international market and threaten the job security of US aviation workers. They also say the ME3 are in violation of the Open Skies agreements that govern air travel between the US and 120 nations including the UAE and Qatar.

The ME3 have repeatedly denied these allegations. Emirates says it has reported 28 years of profitability and returned more than $3 billion in dividends to its investors.

In 2015, Emirates released a report that accused the US airlines of having received more than $100 billion in support from the US government since 2002 in the form of government assumption of pension responsibilities, bankruptcy protection, antitrust immunity, direct grants, loan guarantees, and tax exemptions.

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Over the past decade, New York's John F. Kennedy International Airport has made a concerted effort to improve customer experience and integrate a higher level of luxury amenities. One of the most recent and impressive additions is the Etihad Airways Premium Lounge located inside JFK's Terminal 4.

"Everything we do at Etihad is about providing unparalleled luxury," Etihad senior vice president for the Americas, Martin Drew, told Business Insider during a tour of the facility. "We don't necessarily benchmark ourselves just against other airlines, but more so against some of the finest hotels and restaurants in the world."

Opened at the end of 2015, the lounge extends the Etihad's premium service beyond the aircraft — putting the airline in a prime position to attract highly lucrative business and high-class leisure travelers. In addition to the lounge, the Abu Dhabi-based airline is ramping up its New York operation with the adoption of the Airbus A380 superjumbo on its JFK-bound flights.

Here's a closer look at the JFK Terminal 4's Etihad Lounge.

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As the frosted glass doors slide open, we were immediately greeted by an Etihad Airways employee.

Once inside, the lounge features a fully stocked bar,...

... An assortment of fine dining options, as well as plenty of places to ...

On Sunday, the Department of Homeland Security announced that it has lifted the large electronics ban on US-bound non-stop flights from Abu Dhabi International Airport in the United Arab Emirates.

The removal of restrictions placed upon the airport in March is effective immediately.

This move comes days after Secretary of Homeland Security John Kelly announced a series of sweeping new airport security measures.

According to DHS spokesman David Lapan, Abu Dhabi International Airport, home to Etihad Airways, was able to quickly comply with the new security requirements.

"Etihad Airways & Abu Dhabi International Airport have implemented the required initial enhanced security measures. (Personal electronic device) restriction lifted,"Lapan announced on Twitter. "Kudos to Etihad Airways for swift security changes. Passengers will now be able to bring PEDs into the cabin of their US-bound flights."

According to Etihad, the only airline with non-stop flights to the US from Abu Dhabi, the ban was lifted after DHS officials were able to validate the new security measures at the airline's terminal.

Abu Dhabi along with Shannon and Dublin in Ireland are the only airports outside of North America and the Caribbean to have a DHS preclearance facility. That means passengers on Etihad flights to the US are screened by DHS officials prior to boarding in Abu Dhabi. So when they arrive at their destination in the US, the passengers are treated the same as if they had been on a domestic flight. The establishment of additional preclearance locations is one of the key points in Secretary Kelly's plan.

In a statement to Business Insider, Etihad wrote:

"We welcome the decision by the U.S. Department of Homeland Security to lift the electronic devices ban on flights between Abu Dhabi and the United States, following the successful validation of security measures at the U.S. Preclearance facility at Abu Dhabi airport earlier today (July 2, 2017). Effective immediately, the removal of the restrictions allows passengers flying to the U.S. to carry all laptops, tablets, and other electronic devices onto the aircraft, subject to enhanced security measures. We would like to thank our guests for their understanding and loyalty while the ban was in place."

While the laptop ban may be over for Abu Dhabi and Etihad, it is still in force at nine airports in the Middle East and North Africa — affecting eight major airlines including Emirates, Turkish Airlines, and Qatar Airways.

The prohibition on all electronic devices larger than a mobile phone came into effect in March after intelligence emerged indicating terrorists are working on explosive devices capable of masquerading as a laptop battery.

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Join the conversation about this story »

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Over the past decade, New York's John F. Kennedy International Airport has made a concerted effort to improve customer experience and integrate a higher level of luxury amenities. One of the most recent and impressive additions is the Etihad Airways Premium Lounge located inside JFK's Terminal 4.

"Everything we do at Etihad is about providing unparalleled luxury," Etihad senior vice president for the Americas, Martin Drew, told Business Insider during a tour of the facility. "We don't necessarily benchmark ourselves just against other airlines, but more so against some of the finest hotels and restaurants in the world."

Opened at the end of 2015, the lounge extends the Etihad's premium service beyond the aircraft — putting the airline in a prime position to attract highly lucrative business and high-class leisure travelers. In addition to the lounge, the Abu Dhabi-based airline is ramping up its New York operation with the adoption of the Airbus A380 superjumbo on its JFK-bound flights.

Here's a closer look at the JFK Terminal 4's Etihad Lounge.

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As the frosted glass doors slide open, we were immediately greeted by an Etihad Airways employee.

Once inside, the lounge features a fully stocked bar,...

... An assortment of fine dining options, as well as plenty of places to ...

After years of financial struggles, Air Berlin filed for insolvency on Tuesday.

Germany's second largest airline, although insolvent, is expected to continue operation with the aid of a $176 million bridging loan, Reuters reported.

However, Air Berlin's future remains murky after Etihad Aviation Group, one of the company's main financiers, announced it has cut off the airline's access to its coffers. 

In reaction to Air Berlin's decision to file for insolvency, Etihad wrote in a statement:

"This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to Air Berlin for its previous liquidity challenges and restructuring efforts over the past six years. In April this year, Etihad provided EUR 250 million of additional funding to Air Berlin as well as supporting the airline to explore strategic options for the business. However, Air Berlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions. Under these circumstances, as a minority shareholder, Etihad cannot offer funding that would further increase our financial exposure. We remain open to helping find a commercially viable solution for all parties."

Etihad, which owns 29.2% of Air Berlin, has spent more than $2.3 billion trying to turn around the ailing German carrier. Etihad and Air Berlin have been equity partners since 2012. Unfortunately, the German airline has not been able to deliver Etihad the solid footing in the European market it was looking for.

At the same time, Lufthansa, Germany's national airline, announced it is in negotiations to take over parts of the Air Berlin's operation during the company's reorganization process.

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• Etihad Aviation Group holds equity stakes in seven airlines.
• Two of them, Air Berlin and Alitalia, are now bankrupt.
• The CEO behind the strategy has left Etihad.
• But some investments have paid off.

Etihad's grand plan for global domination looks to be in deep trouble.

In July, the Abu Dhabi, United Arab Emirates-based aviation giant announced a staggering $1.87 billion loss for 2016. This after posting a $103 million profit the previous year.

Etihad blames $808 million of losses on financial exposure to partner airlines such as Air Berlin and Alitalia.

Now things have gone from bad to worse.

On Tuesday, Air Berlin entered into administration, declaring itself insolvent and initiating a major restructuring. Air Berlin's financial implosion happened just three months after Alitalia's bankruptcy in May.

Together, Etihad's total financial exposure to the two troubled European carriers edges north of $4.5 billion.

"Etihad had a very ambitious and creative but very risky strategy, which was to invest in airlines in different countries to gain a proxy presence as an airline group, and two of its riskiest investments were Air Berlin and Alitalia," Henry Harteveldt, a travel analyst for Atmosphere Research Group, told Business Insider.

In July, the chief architect of the plan, former Etihad CEO James Hogan, exited the company he helped build. 

"This development is extremely disappointing for all parties, especially as Etihad has provided extensive support to Air Berlin for its previous liquidity challenges and restructuring efforts over the past six years,"Etihad said in a statement. "However, Air Berlin’s business has deteriorated at an unprecedented pace, preventing it from overcoming its significant challenges and from implementing alternative strategic solutions."

The company declined to comment further on what effect Air Berlin's and Alitalia's financial troubles will have on Etihad Aviation Group. 

Going global

Over the past few years, Etihad embarked on an equity-acquisition spree that has seen the carrier take substantial ownership stakes in a series of "partner airlines." This includes 49% of Alitalia; 29.2% of Air Berlin; 49% of Air Serbia; 24% of Jet Airways; 21.8% of Virgin Australia; 40% of Air Seychelles; 49.8% of Niki; and 33% of Swiss-based Etihad Regional. But Etihad sold its stake in Etihad Regional in July.

Last September, these partner airlines along with Etihad Airways and its accompanying subsidiaries were reconfigured to form Etihad Aviation Group.

In theory, Hogan's partnership concept makes a tremendous amount of sense. Investing in or taking over struggling airlines in advantageous markets for pennies on the dollar while simultaneously growing Etihad's global reach is strategically sound. The approach also allows Etihad to enter potentially hostile markets free of political opposition and without the need to launch an operation from scratch.

In practice, the partnership strategy is much more complex. Some have worked out well for Etihad. For instance, Air Serbia has relaunched and become a solid feeder into the Etihad network. The investment in Jet Airways has helped Etihad unlock the potentially lucrative Indian market. And Virgin Australia has become a viable competitor for Qantas.

At the same time, Germany's Air Berlin and Italy's national carrier, Alitalia, have not fared so well. Both airlines were acquired to help Etihad increase its reach into the prized European and transatlantic markets, and to a certain extent, they have done exactly that. Operationally, though, Air Berlin and Alitalia have continued to bleed money.

On the face of it, the $2.35 billion Alitalia investment seemed like a solid deal. For the cost of a few Airbus A380 superjumbos, the company acquired a major airline with a fleet of 100 planes, Hogan told Business Insider in 2015.

The same goes for the Air Berlin deal. 

"Air Berlin, on paper, looked like it would be very beneficial for Etihad," Harteveldt said. "It gave Etihad access to a major European market that's arguably the strongest in terms of economic strength and demand for air travel."

So what happened?

"These two investments have turned out to be sort of Etihad biting off more than it can chew," Airways senior business analyst Vinay Bhaskara told Business Insider.

What went wrong

According to Bhaskara, there are two types of reclamation projects that tend to succeed in the airline industry. The first is an airline that is underperforming simply because it is "making boneheaded strategic errors" to the point the airline is essentially its own worst enemy. These are easier to fix because they tend to be in good markets with good fundamentals. So a management change should do the trick, Bhaskara said. Jet Airways falls into this category.

The second is an underperforming airline that is government-owned or struggling with an incredible amount of internal dysfunction. These turnarounds can be successful if an outside force such as Etihad is "handed the keys to the kingdom" to tear down and rebuild the airline after making wholesale changes. This is exactly what Etihad was able to do at Air Serbia, Bhaskara added.

Technically, Air Berlin and Alitalia should have gone into this second category. But Etihad was never given the chance to implement the same type of full rebuild as Air Serbia.

With Alitalia, Etihad brought in new management, revamped its product, and improved its service. Many of the old problems that plagued the "Old Alitalia," however, still plague the "New Alitalia" today. Bhaskara said one of the major issues the airline ran into was the powerful labor unions that prevented Etihad from making drastic changes that could have made the airline profitable.

In April, Alitalia entered into administration after workers rejected a management-restructuring plan that would have cut salaries and jobs at the airline.

According to the Financial Times, the last time Alitalia generated an annual profit was in 2002 — one year before the founding of Etihad Airways.

Air Berlin's situation is different than Alitalia's but equally dysfunctional. 

Air Berlin's downfall

According to Harteveldt, Air Berlin faced myriad issues ranging from a delayed airport to a disjointed product strategy. First, the airport. Even though Berlin is one of the largest and most important cities in Europe, it doesn't actually have a world-class airport. The state-of-the-art Berlin Brandenburg Airport was scheduled to open in 2010. But delays have now pushed to as late as 2020. 

As a result, Air Berlin hasn't been able to develop the mega hub it had hoped for in its hometown. Instead, it has to settle for a smaller hub, in Dusseldorf. But that pales in comparison to the hubs Lufthansa has in larger markets like Frankfurt and Munich, Harteveldt told us.

At the same time, Air Berlin has been facing stiff competition from low-cost carriers like RyanAir, EasyJet, WizzAir, and other carriers. And then there was the airlines own "basket case" business strategy.

"Air Berlin just didn't have a clear strategy," Harteveldt said. "It was a low-cost, bare-bones airline for its short-haul European flights, but it tried to be a traditional full-service airline on its long-haul flights. It didn't accomplish either objective very well."

Even though the labor situation at Air Berlin was less contentious than Alitalia, it still plagued the airline.

"In Europe, airlines are high-profile industries that are highly unionized, and the unions work very hard to protect their workers' jobs," Harteveldt said. "Compared to the United States, for example, it very difficult for an airline in Europe to gain the labor efficiency that it needs, whether that be wages or productivity or anything else."

So where does that leave Air Berlin?

What's next for Etihad's partners

While Etihad is willing to explore commercial opportunities with the airline, it has made it clear that after $2.3 billion in investment its coffers are now off limits to Air Berlin.

"You can hear the sound of Etihad wiping its hands of Air Berlin all the way from Abu Dhabi to California," Harteveldt said.

Although Harteveldt believes the Alitalia will likely fly on, the analyst thinks Air Berlin is effectively done as an airline. But Bhaskara believes it's still too early to say whether Air Berlin's fate is sealed.

Air Berlin CEO Thomas Winkelmann has spoken out publicly to reassure his customers that the airline's flights will operate as usual with the help of a bridging loan worth $176 million.

All is not lost for the Etihad partner airline strategy.

"In some cases, it looks like Etihad bet on some winning horses," Harteveldt said. "Alitalia is still on the track and so we can't call that race yet."

While it seems as if the Etihad partnership strategy will probably live on to fight another day, Air Berlin and Alitalia have proved to be two painful and expensive speed bumps along the way.

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Over the past decade, Etihad has distinguished itself as one of the finest international airlines in the world. One of the Abu Dhabi, United Arab Emirates-based carrier's calling cards is it swanky first and business class cabins. In 2017, consumer aviation research firm Skytrax named Etihad's first class cabin the best in the world. While its business class cabin was named the fourth best in the world by Skytrax.

Etihad's arsenal of luxury accommodations includes The Residence, a 125 square-foot, flying home found exclusively on its fleet of Airbus A380 superjumbos. Then there is its standard 45 square-foot private first class suite, dubbed The Apartment. Finally, Etihad's business class passengers travel in a more intimate private suite called The Studio.

An important part of that premium performance is a well-equipped amenity kit. It's a set handy items that really help round off the complete in-flight experience.

Here's a closer look at Etihad premium cabin amenity kits.

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Etihad's premium cabin is renowned for its luxury appointments. This includes The Residence which features a living room and...

... A full bedroom.

Passenger's traveling in The Apartment get a smaller, but still incredibly lavish first class suite.

• Etihad Airways, the luxurious national airline of the United Arab Emirates, trains some flight attendants to serve as flying "nannies" during long-haul flights.
• Dutch native Eileen Louwerse is one of those flight attendants.
• To take on the role, she had to first become a flight attendant, then do additional training through the college that produces the British royal family's nannies.

Eileen Louwerse, 26, is a flying nanny for Etihad Airways, the national airline of the United Arab Emirates and one of the most luxurious and best valued in the world.

Louwerse is a flight attendant, but in addition, the Dutch native was trained at Norland College in the United Kingdom — where the nannies of British royals come from — to support parents during the flight. The nanny service is free for everyone in business class, first class, and economy, and is only available on Etihad's long haul and extra long haul flights.

How do you become a flying nanny? Business Insider spoke with Eileen Louwerse.

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Liking kids is a must

For many people it sounds rosy: flying around the world, and, in the meantime, looking after children. Yet you certainly shouldn't think too lightly about the job, says Louwerse.

"You have to like children, otherwise you are in the wrong place anyway. You must have the ability to move around in their world."

Training to be an in-flight nanny is optional. If children aren't your thing, you might be better off working as an 'ordinary' flight attendant.

Nannies must have the proper background training

Etihad requires a Minimum High School certification or any higher education.

"I studied leisure and hospitality," said Louwerse. "During my first internship I worked abroad in an animation team [like a camp counselor], and I really liked the contact with children. For my last internship, I went to Spain to work as a hostess there. I commuted a lot between the airports and hotels and saw lots of stewardesses. Then I thought: That's really fun."

They must be flight attendants before becoming flying nannies

"I went to apply and was able to work for Ryanair in London quite soon," Louwerse said about her early days. "I wanted to continue to grow and applied for a job at Etihad. That was when they just had new uniforms, the new A380, the food and beverage managers ... I thought it was very nice to work in a company that grows every day."

Why did she not stay with Ryanair? "I liked that too, but at some point I wanted to work internationally," she said. "Etihad is, of course, highly regarded as the best airline in the world in 2009, 2010, and 2011."

• Consumer aviation website Skytrax releases an annual list of the best airlines in the world.
• Airlines from Asia dominate that list, taking 12 of the top 20 spots. 
• In fact, Asian airlines have occupied the top spot since 2007.

Every year, consumer aviation website Skytrax releases its list of the best airlines in the world. For 2017, Qatar Airways took home the top prize for the second time in three years and the fourth time in the last seven. Including airlines from the Pacific Rim, South Asia, and the Middle East, carriers from the Asian continent as a whole performed tremendously well in the Skytrax rankings, occupying 12 of the top 20 spots.

In fact, a non-Asian airline hasn't held the top spot since 2006 when British Airways was awarded Airline of the Year.

The Skytrax rankings are based on the impressions of 19.87 million travelers from 105 different countries. The survey, which covered more than 325 airlines, measured 49 parameters ranging from boarding procedures to seat comfort to the quality of service.

Here's a closer look at 12 best airlines from Asia:

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12. Asiana

Overall rank: 20

Why it's awesome: Once again, South Korea's Asiana earns high marks from Skytrax for its cabin crew, cleanliness, and economy class products. Asiana currently operates a fleet of modern Airbus and Boeing jets.

See additional airline information at Skytrax.

11. Japan Airlines

Overall rank: 16

Why it's awesome: Japan's flag carrier is one of the most respected airlines in the world. Reviewers on Skytrax praised Japan's second largest airline for its attentive service, well-coordinated ground staff, and comfortable cabin.

For 2017, Japan Airlines won the award for Best Economy Class Airline Seat. 

See additional airline information at Skytrax.

10. Thai Airways

Overall rank: 11

Why it's awesome: Thai Airways has long been an industry leader in quality service, so it's no surprise to find the Thai national carrier high up on the list. Though its most heralded products are its business and first-class services, fliers found its economy seats to be of high quality as well.

Economy fliers on Skytrax also noted the crew's friendly demeanor and delectable dining options.

In 2017, Thai Airways took home the award for the World's Best Economy Class, the World's Best Economy Class Onboard Catering, and the World's Best Airline Spa Facilities.

See additional airline information at Skytrax.

• Flight EY474 from Abu Dhabi to Jakarta diverted for a medical emergency.
• Cleaners later found a dead newborn hidden in a drawer.
• A 37-year-old woman, who was returning home after four years of domestic work in Abu Dhabi, was arrested upon returning to Indonesia.

A newborn child was found dead on an airplane over the weekend, wrapped in a plastic bag.

Cleaners made the gruesome discovery in a drawer inside a bathroom of an Etihad plane on Saturday night after it landed at Soekarno-Hatta International Airport in Jakarta, Indonesia, Agence France-Presse reported.

The police have arrested a 37-year-old Indonesian woman, identified only as Hani, who they think secretly gave birth on the flight, EY474.

Hani had worked as a domestic helper in Abu Dhabi, United Arab Emirates, for the past four years and has a husband and children in Cianjur, Indonesia.

According to Indonesian newspaper The Jakarta Post, Hani said the child was a result of a relationship with her employer in Abu Dhabi.

The woman began bleeding halfway through the flight, according to AFP, and the Airbus A330 she was traveling on had to divert at Bangkok so a medical team could evacuate her.

A passenger, Francesco Calore, told AFP: "The woman was in economy class but then [the airline] laid on a business-class seat with an oxygen mask. The captain then announced we should divert to Bangkok."

It wasn't clear whether anybody on board the plane thought Hani was pregnant or had given birth.

Etihad's guidelines say expectant mothers need a medical certificate to fly in the last 10 weeks of their pregnancy and should not fly at all in the final four.

Hani returned to Indonesia early Sunday morning, the day after her original flight had arrived. She was arrested at Jakarta Airport.

Ahmad Yusef, Jakarta's police chief, told AFP the migrant worker "didn't look healthy."

The cause of the infant's death remains unknown.

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• The Trump administration and the government of the United Arab Emirates came to an agreement that looks to have ended a long-standing feud between US airlines and their counterparts from the Persian Gulf.
• The US coalition led by American, Delta, and United claimed victory over Emirates and Etihad on several key points, but the text of the agreement does not support this assertion.
• At the end of the day, nothing has really changed. 

Last week, the governments of the United States and the United Arab Emirates agreed to settle their differences on air transport between the two countries. This agreement, along with a similar deal the Trump administration made with the Qatari government in January, looks to have effectively ended the long-running dispute between America's three largest airlines and their rivals from the Persian Gulf.

News of the deal has supporters of US3 claiming victory. The Partnership for Open and Fair Skies, the organization tasked with representing America's big three in the matter went as far as running full-page ads congratulating the Trump administration on the victory in the New York Times and New York Post. 

"This agreement is a win for American jobs and shows that President Trump stands up to countries that violate our trade agreements," the Partnership's campaign manager, Scott Reed said in a statement shortly after news of the agreement surfaced.

The CEOs of American, Delta, and United (US3) all issued similar statements of effusive praise. 

For years, the US3 have accused Emirates, Etihad, and Qatar Airways (ME3) of using $50 billion worth of unfair subsidies to squeeze competition out of markets by lowering prices to unsustainably low levels. The US3 claims such behavior is in violation of the Open Skies agreements that govern air travel between the US and the two Middle Eastern nations. The ME3 has consistently denied these allegations. 

The US3's anger over the arrival of the ME3 and their adulation following the agreement is understandable. America's airlines have only recently recovered from the devastating effects of 9/11 and the financial crisis through a combination of shrewd management, a lot of belt-tightening, and a fortuitous fall in fuel prices. Even though American, Delta, and United are three of the world's most profitable airlines, their money-saving strategies have also been pilloried by the press and their passengers.  

So when they see three fast-growing newcomers arrive on the scene sporting fleets of brand new planes and splashing their cash, it can be hard to stomach. 

And while the agreement does effectively quell the US3's threat to reexamine the terms of the US-UAE Open Skies agreement the question must be asked— Did it actually change anything? 

Not really. 

No real winners here

The US3 and its supporters claimed victory in getting the UAE to agree to greater financial transparency and to concede that its subsidies of state-owned Etihad and Emirates are harmful to competition. The US3 also claim to have gotten Emirates and Etihad to freeze the number of its fifth freedom flights or flights between the US and the UAE with a stopover in a third country.

Business Insider was able to obtain the text of the agreement called a "record of discussion" and it quickly became evident that hardly any of US3's claimed "victories" reflected reality. 

First, the UAE's admission that subsidies are harmful to competition is not clear-cut. Even though both delegations agreed that "government support in whatever form may adversely impact competition," they also agreed that such support "is neither uncommon nor necessarily problematic in the global aviation sector." 

The wording here is incredibly loose and doesn't compel any real action on the part of the Emiratis. 

And then there is the issue of the fifth freedom flights. The US3's representatives along with White House Trade advisor Peter Navarro trumpeted their decisive win in getting the UAE government to freeze the number of fifth freedom flights operated by its airlines. 

Well, the UAE government doesn't seem to agree. 

"All the terms and provisions of the Air Transport Agreement including fifth freedom rights remain fully in place, with UAE and US airlines free to continue to add and adjust routes and services," Yousef Al Otaiba, UAE Ambassador to the US, said in a statement. 

When contacted by Business Insider, Emirates Airline echoed the UAE government's stance on the matter.

In fact, the fifth freedom part of the agreement isn't even in the record of discussion. It's actually the subject of a side letter sent by the UAE government to US assistant secretary of state Manisha Singh. The UAE does not agree to freeze the number of fifth freedom flights its airlines operate. Instead, the letter simply states that the country's airlines have notified the UAE government that it has no current plans to launch more of fifth freedom routes.

Fifth freedom flights are a major point of contention because they threaten the US3's lucrative routes to Europe, Asia, and South America. 

But that's more a factor of economics than politics. Etihad has never operated fifth freedom routes and with the Abu Dhabi-based airline cutting routes left and right, it seems unlikely they were going to start. 

On the other hand, Emirates operates two fifth freedoms — New York-Milan and Newark-Athens. They are also the only two fifth freedoms operated by any of the ME3 airlines. These also happen to be the only two routes where the US3 and the ME3 compete directly against one another. 

Here, again, economics seems to be the name of the game. Emirates Airline president Sir Tim Clark has been very vocal about the deleterious effects the Trump administration's immigration policies have had on passenger traffic to the US. Over the past year, the airline has reduced the number of flights to major US cities like Boston, Los Angeles, Orlando, and Seattle. 

The US did score some minor wins

With that said, the negotiations did bear some fruit.

Both delegations agreed to release audited annual financial statements using international accounting standards. The text also noted that the US3 and Emirates already release such statements every year. So the real movement here is on the part of Etihad. 

But with Etihad in flux, the agreement stipulates that it won't have to issue these statements until its on-going restructuring is complete. 

In addition, the delegations agreed to charge all airlines market rate for use of airports and facilities. This means the UAE airlines will probably have to pay a bit more to use their own airports. 

However, one of the most important points and arguably the most overlooked point in all of this is the two governments' agreement to reaffirm their stance on counter-terrorism activities. The discussion actually opened with the two delegations agreeing to work towards securing regional stability and fighting terrorism. 

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